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yahoo stock, us stock market
Begin Part 2 of 2
SUBSCRIBER QUESTIONS
Q: How do you figure the target sell points for stocks like EASI and others breaking out to new highs? Is there a percentage you use? From what point do you start figuring since they keep making new highs?
A: In this market where we see a solid move then sell back, we are looking for a 20% move as our target. That might be a bit much, and if a stock starts to show topping signs after 15% (e.g., a gap higher and selling back, a close well off of the high on either a gap or just a run higher from the open, or a doji), we will also take at least some profits at that point. We determine the target from the point where it clears that resistance that takes it to the first new high. On successive highs we have to look at how far the stock moves on its runs and calculate the move from that point. We also have to keep in mind how many runs it has had on this move; is it on the third or fourth run? The move might not be as high, or it might happen in one or two sessions (i.e., jump up fast) and then turn fast.
Q: How long do the online seminars last?
A: Each seminar runs from 3 to 4 hours including material covered and questions and answers.
TEAM TRADES
We were looking at some aggressive plays today, and it might bite us tomorrow with the CSCO response, but we felt it was worth taking some positions ahead of the number as stocks were bouncing up off support after low volume pullbacks.
RFMD: This one may hurt. We liked that it took off in the morning and came back and tested near the 10 day MVA later in the session but did not violate the morning low. We issued an alert that we were looking at positions ahead of the close and got in with some stock positions at 29.70. The stock rallied after hours to over 30, but then tanked on the Cisco news. It was holding above its 10 day MVA after hours, so we will see. We may add some more positions on it if it can hang on.
SMTC: SMTC was in the same boat, testing below its 10 day MVA on its low with 2 hours to go, and then rallying up toward the close. We liked the action down to test support and then the move back over it so as it moved higher toward the close we picked up some stock positions at the ask (the spread was about 3 cents when we bought) and we tried to get some options. The market maker had not traded many contracts so we tried to shave 15 cents off the spread. Well, the usual happened, the bid became our limit price while the ask remained the same. Narrowed the spread artificially just to jack with us. So we decided not to budge to see if the stock pulled back a bit; we could always get some of the options tomorrow we thought. Well, the stock did pull back a bit, but with our order in there the market maker was being really stingy. We pulled the order and were going to put in another one but the stock moved higher right at the close so we decided to wait. We may be hating ourselves over a few pennies, but we think we will get another chance tomorrow if the chips can shake off CSCO.
THE PLAYS:
Reading the Plays: Please note that when we reference the 10, 18, and 50 day moving averages (MVA), those are exponential moving averages (EMA). The 200 day moving average is always simple (SMA). We will note when we reference a particular MVA differently, e.g., a simple 50 day MVA. Please click on the Yahoo and chart links for company and charting information.
New note for reading plays: A "prior high" refers to the high at the start of a base.
BEST PLAYS: From last night' report: We still like the looks of FEIC, holding at 40 on low volume in its ascending wedge. The same goes for CPWR, SMTC, CTXS and BRCM (though Cisco may impact this one) from last night; all are holding support and their patterns.
Best Plays:
1) MCHP: Tested support and ready to move.
2) AZO: Making a move up after testing.
3) WM: Ready for another run up from support.
4) VRSN: An old leader that is perking up.
Updated: As stated above, SMTC pulled back again, completing its test of the 10 day MVA on below average volume, and we still like BRKS and MCHP a lot (covered below). Most of the chips we have been watching remain intact, but we will be careful with them in light of today's downgrades. Just be sure the stocks hit chosen buy points and volumes before entering with positions.
BRKS (Brooks Automation--$50.26; -0.93; optionable (BQE): Chip Equipment
http://biz.yahoo.com/p/b/brks.html
STATUS: We noted BRKS' improved chart last night, and it's looking even better after today. The stock has formed a 3-month cup, and is pulling back in a handle on decreasing volume until today, when volume rose. The stock held support at 50, the level tested on the previous 2 sessions, with today's low testing the 10 day MVA at 49.26 and closing with another tight doji. We are looking for a move up from here on continued rising volume (308,100; avg. 554,000). BRKS is now showing strong money flow. The stock was a former leader in that portfolio. Target: 65
BUY POINT: Breakout: 54.38, on volume of 816,000+. Stop: 50.03. A buy on the breakout up to 57.10.
POSITION: Stock and/or October $45 calls to buy (BQE JI).
http://www.investmenthouse.com/cd/brks.html
MCHP (Microchip Technology--$35.57; -0.64; optionable (QMT): Chips: Specialized
http://biz.yahoo.com/p/m/mchp.html
STATUS: MCHP has pulled back for a test of its 18 day MVA (34.89), tapping that on the low of 34.95 then bouncing back slightly on a small rise in volume (1.27 million; avg. 2.1 million). We really like how the stock is holding above the June highs (34.98) and some July highs as well, and look for a move up in a chip rally. Could be starting that move right here. Money flow looks great. Target: 42.
BUY POINT: Aggressive: 36.12 (over the 10 day MVA), on volume in the range of 1.7 million or better. Stop: 33.23
POSITION: Stock and/or October $30 calls to buy (QMT JF).
http://www.investmenthouse.com/cd/mchp.html
Other stocks that have pulled back on low volume:
AZO (Autozone--$47.00; +0.63; optionable (AZO): Auto Parts Stores
http://biz.yahoo.com/p/a/azo.html
STATUS: Has tested its breakout and looks ready to move up from support, the 18 day MVA (45.77). That is the support from which AZO broke out in early July, for the strong run to the July high of 49.20. That breakout was on a gradual, lateral-type pullback, which is similar to the pattern AZO has formed here. Volume was up slightly (705,200; avg. 773,000) as the stock moved up from the 18 day MVA. Looking for a strong move up. Target: 57.
BUY POINT: 49.33, on volume of 952,000 or better. Stop: 45.38 (just below the 18 day MVA).
POSITION: Stock and/or December $40 calls to buy (AZO LH).
http://www.investmenthouse.com/cd/azo.html
WM (Washington Mutual--$40.56; +0.18; optionable (WM): Savings & Loans
http://biz.yahoo.com/p/w/wm.html
STATUS: WM has been consolidating along its 10 day MVA, testing support of its 18 day MVA on occasional lows over the last 2 weeks. Volume has remained below average and was again so Tuesday, though up to 2.9 million (avg. 4.17 million). WM showed a doji right at the 10 day MVA, moving up slightly on the higher volume. We continue to look for a strong move up (the stock was covered back on July 31), looking at entry points on a move over last week's high at 41.25. Looks good! Target: 48.
BUY POINT: Aggressive: 41.38, on volume of 4 million or better. Stop: 38.07 (50 day MVA, 38.66)
POSITION: Stock and/or October $35 calls to buy (WM JG).
http://www.investmenthouse.com/cd/wm.html
THE PORTFOLIOS: Each report, we look at these to see which is in a buy position. We don't cover them all each time, just the ones that look ready to pick up a few shares.
THE LEADERS: We have revamped this portfolio, dropping for now CPN, SGR, NATI and BRKS. Those stocks have, for the most part, dropped off and need to form bases or do some more work in ones already existing. To the New Leader section we are adding DGX, EBAY, FRX, PSFT, ADVS, and BMET. In the Previous Leader section, VRSN, VRTS, ADBE and SEBL are retained. Ones dropped include AMCC, ARBA, BEAS, BRCD, CIEN, EMC, EXTR, GLW, JNPR, NEWP, NTAP, PMCS and SCMR. All of these stocks will be kept on watch in context with improvement in their sectors and the market.
New Leaders: ESRX, LLL, ACS, NVDA, DGX, EBAY, FRX, PSFT, ADVS, BMET.
Previous Leaders in which we are still interested: ADBE, SEBL, VRSN, VRTS
EBAY made it back over the 18 day MVA as it did Friday on that strong volume move. Volume was lower today, however, but the stock is looking interesting once again as it appears ready to hold support here, at the 50 day MVA. It remains in the cup with handle base.
VRSN (Verisign--$54.75; +1.51; optionable (VUQ)): Internet Software & Services
http://biz.yahoo.com/p/v/vrsn.html
STATUS: VRSN is deep in a 17-month base, and is below its 200 day MVA (67.95), but we have been watching it since it broke back over its 50 day MVA (53.09) July 27, then pulled back from the August high of 57.93 on steadily decreasing volume. That is good price/volume action, continued Tuesday on a move off the support on volume that bumped up to 3.9 million (avg. 7.4 million). This is the start of the move for which we were looking, and will consider an aggressive play up to the 60 range (near June and July highs). We can look at taking more long-term positions later, perhaps on a move over the 200 day MVA; right now VRSN is positioning for a potential shorter-term upside trading play. Money flow looks good.
BUY POINT: Aggressive: 55.78 (over the intraday high of 55.65), on volume in the range of 5 million or better. Stop: 51.32
POSITION: Stock and/or September $55 or $60 calls to buy (QVR IJ or IK).
http://www.investmenthouse.com/cd/vrsn.html
UP & COMERS PORTFOLIOS: We have revamped the Up & Comers portfolio, and are dropping EXDS, TQNT, BVSN, SANM, PKI and GMST for now, adding BBBY, IGT, RCII, CHS, KG and AEOS.
LNCR, BJ, ANF, LOW, HI, THQI, BBBY, IGT, RCII, CHS, KG, AEOS.
LOW is holding at the 50 day MVA and the up trendline noted in last night's report. Volume is still below average though somewhat higher; the hold at support is encouraging. Retail stocks bounced back a bit after Monday's poorer showing. HI, after consolidating in the range of its 50 day MVA for several days, finally broke back over the 18 day MVA on slightly higher (still below average volume). That is an interesting move, so we are watching it closely!
MEMBER PORTFOLIO: We have tallied the results, and are adding the stocks subscribers voted into an updated portfolio. Two of the former members have retained their position in the mix, BRCM and CHKP. The new stocks are AMAT, JNJ, MSFT, AOL, HGSI, BUD, and PXLW.
New portfolio as selected by the subscribers. Some of these stocks are still struggling to move higher in their bases, and will likely continue to trade in close ranges just like the market. We'll be ready to catch them when they are ready to move. The new list: BRCM, CHKP, AMAT, JNJ, MSFT, AOL, HGSI, BUD, PXLW.
Old members: BRCM, CHKP, CSCO, EMLX, IDTI, INTC, JDSU, MVSN, NT, PWER, SUNW, VTSS
AMAT lost Monday's doji and dropped through support and the 50 and 200 day MVAs on stronger volume. Support looks decent at the low (46) so we'll keep watching for a move back over the 50 day. BRCM is holding just above 45 selling back down mildly on just higher volume; we want to see that stock hold the support at 45.
Good Investing!
Jon L. Johnson and The Daily Staff
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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yahoo stock
us stock market
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